ALJ/SMW/jt2 Date of Issuance 1/31/2011

Decision 11-01-036 January 27, 2010

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company for approval of 2010-2011 SmartAC (TM) Program and Budget (U39E).

Application 09-08-018 (Filed August 28, 2009)

DECISION APPROVING PACIFIC GAS AND ELECTRIC COMPANY'S 2010-2011 SMARTACTM PROGRAM AND BUDGET

Table of Contents

Title Page

DECISION APPROVING PACIFIC GAS AND ELECTRIC COMPANY'S 2010-2011 SMARTACTM PROGRAM AND BUDGET 22

1. Summary 22

2. Background 22

2.1. Historical 22

2.2. Procedural 33

3. Procedural Issues 44

3.1. Admittance of Testimony and Exhibits into Record 44

3.2. Motion to Seal the Evidentiary Record 55

3.3. Motion to Modify Proposed Decision and Motion to Modify Settlement Agreement 66

4. The Settlement Agreement 66

4.1. SmartACTM Program Budget 66

4.2. Reasonableness Review 77

4.3. Information Technology Costs and Budget Category Flexibility 88

4.4. Reporting 99

4.5. Financial Incentives 99

4.6. Rate Schedules 1010

4.7. Price Response Trigger 1010

5. Discussion 1111

5.1. Standard of Review 1111

5.2. Settlement Agreement is Reasonable in Light of the Whole Record 1212

5.3. Settlement Agreement is Consistent with Law 1212

5.4. Settlement Agreement is in the Public Interest 1313

6. Price Response Trigger 1313

7. Comments on the Proposed Decision 1414

8. Categorization and Need for Hearing 1414

9. Assignment of Proceeding 1414

Findings of Fact 1515

Conclusions of Law 1515

ORDER 1717

Attachment A - List of Testimony and Exhibits Entered into Record in A.09-08-018

DECISION APPROVING PACIFIC GAS AND ELECTRIC COMPANY'S 2010-2011 SMARTACTM PROGRAM AND BUDGET

1. Summary

By this decision, we adopt an unopposed revised settlement agreement¹ for the Pacific Gas and Electric Company (PG&E) 2010-2011 SmartAC^TM Program and Budget. Parties to the settlement include PG&E, the Division of Ratepayer Advocates, and The Utility Reform Network. Based on this settlement, PG&E is authorized a budget of $52,988,709 for its SmartAC^TM Program for the 2010-2011 period, which is part of the adjusted total program cost of $112.2 million for the period 2007-December 31, 2011. With the adjusted budget, PG&E is authorized to install up to 259,000 total load control devices through December 31, 2011. PG&E estimates that 259,000 devices equate to about 161 megawatts under the 1-in-2 weather year condition.

In addition, the settlement agreement allows PG&E to add a price response trigger at bid cap beginning in 2012, increase the monetary incentive to customers, and implement additional quality control procedures with respect to its Measurement and Evaluation Procedures, which PG&E will report, and pass through to customers the financial benefit of a resolution to this issue.

¹ See http://docs.cpuc.ca.gov/published/proceedings/A0908018.htm.